You are here

Indonesia seeks to rejoin Opec, but not cut output

Mon, Jun 05, 2017 - 6:07 PM

Indonesia has sent a letter to the Organization of the Petroleum Exporting Countries (Opec) requesting to reactivate its membership in the group as long as it can avoid output cuts, energy ministry officials said.

PHOTO: REUTERS

[JAKARTA] Indonesia has sent a letter to the Organization of the Petroleum Exporting Countries (Opec) requesting to reactivate its membership in the group as long as it can avoid output cuts, energy ministry officials said.

"Yes, it's true," Energy and Mineral Resources Ministry spokesman Sujatmiko told Reuters via text message, when asked to confirm the letter had been sent. Mr Sujatmiko, who goes by one name only, said that the letter was sent to Opec on May 24.

The letter was sent after Indonesia was invited to rejoin Opec, Deputy Energy and Mineral Resources Minister Arcandra Tahar told Reuters, adding that a return would only be possible if net importer Indonesia can avoid production cuts.

"Several countries approached us and told us to join Opec again, but we answered that Opec's strategy to cut production was not in line with our national priorities - that's why we left," said Mr Tahar.

Market voices on:

"We're considering the invitation as long as our production doesn't get cut."

According to Hadi Mustofa Djuraid, a special staffer to the energy minister, Indonesia's proposal had been agreed to "in principle" by other members of the cartel, but it is waiting for a formal response from Opec on the matter.

Indonesia's Opec membership was suspended in December, less than a year after rejoining the cartel, after saying it could not agree to the group's proposed production cuts.

Opec's members on May 25 agreed to extend a crude oil output cut of 1.2 million barrels per day (bpd) to tighten global supply and support prices. They were joined by other major producers, most notably Russia, that agreed to cut 600,000 bpd.

Indonesia produced an average of 829,000 bpd in May, just above its 2017 budget target of 815,000 bpd.